Vietnam emerges as a rising market for Apple
The US technology giant launched an online store in Vietnam on May 18, giving local consumers the chance to buy any Apple product directly for the first time.
The recent opening came following the high-profile launch of its first physical shops in India, recognizing the growing importance of emerging markets for the iPhone maker, said CNN.
Markets such as Vietnam, India, and Indonesia are rapidly becoming more important for Apple, as its growth in developed markets, including China, slows down, prompting the company to focus on places where it’s traditionally been less active, according to the media outlet.
Tim Cook, CEO of Apple, pointed to the company’s prospects in emerging economies, calling them bright spots in the company’s financial results. On an earnings call made this month, Cook said he was “particularly pleased” with the performance in these markets during the first three months of the year.
Daniel Ives, managing director of Wedbush Securities, predicts that “over the coming years, Indonesia, Malaysia, and India will comprise a bigger piece of the pie for Apple, given its efforts in these countries.”
Meanwhile, Chiew Le Xuan, a research analyst who covers smartphones in Southeast Asia for Canalys, said May 18’s launch of an online store in Vietnam showed how Apple was “further cementing” its presence in emerging markets.
He said the tech giant had been “actively increasing” its presence in the region over recent months, ramping up its distribution and network of authorised resellers, especially in Malaysia, adding that Apple has ample room to run in these markets.
Apple joins a growing list of global businesses that have become bullish on Southeast Asia, where increasing investment is being poured into manufacturing.
The region’s consumer base also holds promise, with the number of middle-income and affluent households in economies such as Vietnam, Indonesia, and the Philippines projected to grow by around 5% annually through to 2030, according to the Boston Consulting Group. These figures have led the consultancy to dub this group of consumers “the next mega-market.”
The allure of Southeast Asia’s rising middle class “has changed the dynamic in these countries, which previously Apple stayed away from,” according to Ives.
However, challenges remain as premium brands like Apple have struggled for years to compete in emerging markets because of the price of their products, choosing instead to rely on local resellers.
iPhones, which cost between US$470 and US$1,100, are expensive for consumers in less developed Southeast Asian economies, where the bulk of smartphone shipments are priced under US$200, according to Chiew.
He outlined that Apple’s absence from places such as Cambodia or Vietnam was typically more apparent around the launch of a new iPhone, particularly as buyers from those countries often flew to Singapore or Malaysia in order to purchase devices and take them back for resale.
This could change over the coming years, particularly as Apple continues to increase its firepower in the region, he noted.
Vietnam among world’s earliest in banking digital transformation: forum
Speaking at the Financial Services – Retail Banking Forum in Ho Chi Minh City last week, Vu Viet Ngoan, former chairman of the National Financial Supervisory Commission, said the habit of using digital products had become more prevalent than ever in Vietnam.
More than 30% of the population uses banking apps, second globally only after China (41%), according to Ngoan.
Vietnam’s banking and financial sectors would continue to play a key role in establishing a “fully digitised, human-centred system”.
He also pointed out that the digital transformation in the country would be an important process of how banks and financial institutions analyse, interact and satisfy their customers.
The government has set a target of increasing financial inclusion to cover more than 80% of the adult population by 2025.
Phan Thanh Duc, dean of the management information system faculty at the State Bank of Vietnam’s (SBV) Banking Academy, said Vietnam had recorded a surge in digital payment everywhere from online marketplaces to small convenience stores and even vegetable and fruit vendors.
Le Duc Anh, director of the Ministry of Industry and Trade’s Centre for Information and Digital Technology, pointed out that technologies such as blockchain, AI, cloud computing, machine learning, and customer data collection, management and analysis were being adopted.
The banking sector had invested over 15 trillion VND (639.22 million USD) in digital transformation as of the end of last year, according to a report by the SBV.
Digital payments have been growing at 40% for the last four years, one of the world’s fastest digital transformation rates.
According to the report, more than 95% of Vietnamese banks have a digital transformation strategy.
Around 90% of banking transactions are handled through digital channels with 74.6% of adults having a bank account.
As of March around 3.71 million mobile money (or mobile payment) accounts had been opened, over 70% in rural, remote and disadvantaged regions across the country.
Non-cash payments have also seen significant growth, with 82 credit institutions offering internet-based payment services and 51 offering mobile payment services as of the end of last year.
There are 48 licensed intermediary payment organisations.
Digital transformation has helped banks bring down the cost-to-income ratio to 30%, on par with regional and international standards.
But experts say the legal framework for digital financial services is inadequate.
It is vital to improve institutional frameworks and upgrading infrastructure, they say.
The lack of human resources with up-to-date skills is another major challenge to digital transformation, they warn.
Organised along with the forum was a fair introducing the advancements needed for the financial industry’s digital transformation.
The event was hosted by the Vietnam Association of Securities Business, the Vietnam Digital Communications Association, and the International Data Group.
Source: Nhân Dân
Vietnam’s first unicorn VNG reports VND1,500 bln after-tax loss in 2022
The fact that the unicorn recorded more expenditures connected to taxes, intangible fixed assets, and allowance for financial investment activities led to the greater loss after taxes that the company experienced.
VNG aimed for a revenue of VND 10,178 billion in 2022 and anticipated a loss of VND993 billion after accounting for taxes. Therefore, the management unit of Zalo has merely met about 77% of the revenue plan, and the loss after taxes surpasses the projections.
The company recorded a loss of more than VND90 billion after taxes for the first quarter of 2023, with a net loss of more than VND40 billion during the same time period. The increase in net revenue to 1,852 billion Vietnamese Dong was 11% more than the same time the previous year.
The majority of the reason for VNG’s loss in the first quarter of 2023 stems from the fact that the firm is still under pressure from huge operational expenditures. The selling expenses for the company totaled VND544 billion, and the administrative expenses totaled VND337 billion. On the other hand, as of the end of March 2023, the total amount of the company’s undistributed profit after taxes amounted to VND 5,052 billion.
VNZ shares have been subject to trading restrictions since May 25 on the Hanoi Stock Exchange. This is because the company was late in filing its audited financial accounts for 2022 by more than 45 days, which is in violation of the laws. The trading of shares will take place solely on Fridays.
With a price of VND 771,900 per share as of the market’s close on May 29, VNZ continues to be the most expensive stock on the stock exchange.
India car rental app Zoomcar leaves Vietnam after 1.5 years
For customers, the app stops service from May 24, and will serve any bookings dated before May 24. Zoomcar will fulfill its obligations of payments to car owners normally until June 30.
In Vietnam, Zoomcar initially operated in Ho Chi Minh City and had plans to expand to Hanoi and Danang in 2023, as part of its target to become the biggest car rental service in Vietnam, said Zoomcar Vietnam CEO Kiet Pham. Vietnam’s car rental market, with a compound annual growth rate (CAGR) of 14%, can reach $884 million in 2027, he added.
The business attributed the decision to the market dynamics and projected complicated developments.
The car rental market in Vietnam has recently witnessed many new players, leading to fierce competition.
In March, Pham Nhat Vuong, chairman of Vietnam’s largest private conglomerate Vingroup, set up a new company, named GSM (Green-Smart-Mobility) JSC, offering electric car and motorbike rental and taxi services. It is the first green and integrated transport service model deployed in the world to popularize an electrified mobility experience, according to the company.
In December 2021, MoMo, a top e-wallet app in Vietnam, launched its car rental service. The move was in cooperation with Mioto, a HCMC-based car rental business. MoMo said its service would deliver cars to users’ homes and is available across major cities and provinces of Vietnam.
Foreign businesses also participate in the market. In 2017, MP Executives and Enterprise Holdings Inc. formed a partnership to launch Enterprise Rent-A-Car in Asia Pacific, starting with Vietnam. Enterprise Rent-A-Car is among the largest transportation solutions providers in the U.S.
In 2019, U.S. car rental business Hertz returned to Vietnam with initial operation in HCMC, after first-time operation in 2012. The Vietnamese franchisee, named New City Rent A Car, aims to serve foreigners in Vietnam and businesses with long-term demand to hire cars for staff.
Source: The Investor
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